With four children to support and without a stable income, it was an everyday struggle to make ends meet for Mr. Danelito Castro and his wife. They were so hard-pressed that they could hardly pay basic monthly bills that amounted to a few hundred pesos (less than US$10). Faced with these circumstances, Mr. Castro set his mind on establishing a small business – one that he could immediately start with minimal capital. The couple decided to manufacture herbal products, since they both had extensive knowledge and background on the medicinal properties of trees. To differentiate their product from the wide range of herbal products already available in the market, they used genuine extracts from 49 kinds of trees with medicinal properties. With an initial capital of PhP 3,000 (US $68), they were able to manufacture and produce the first batch of Millennium Herbal Oil using empty liquor bottles as containers.
Within a day, the product was sold out. Soon after, word-of-mouth testimonials on the effectiveness of their product spread throughout their municipality in Zamboanga del Norte. The product was used to treat arthritis, rheumatism, back pains, cramps, numbness, muscular and joint pains, according to the favourable testimonials of those who purchased it. There were also two cases of cysts being totally cured by the product. The product, which is 100% natural, became known for its uniqueness and effectiveness.
Capitalizing on the product’s favorable launch, they decided it was time to expand and sell their products to the neighbouring municipalities. Because that required additional capital, Mr. Castro was happy to learn about the MABS-SIPAG product of the Rural Bank of Liloy, a microfinance product specifically designed for microentrepreneurs. Upon complying with the bank requirements, he immediately got a loan for PhP 50,000 (US $1,100), which funded his expansion plans. In 2008, they introduced a new liniment product using their Millennium Herbal Oil as the base ingredient. The product was also well received. Mr. Castro credits this success to the research and product development support provided by the Department of Trade and Industry (DTI). “DTI assisted us in many ways. They helped us connect with suppliers of small bottles in Cebu City to improve our packaging and label.” The continuing assistance also helped them come up with variations of their product, ranging from soap to vapour rub.
Succeeding loans from the bank paved the way for their herbal oil manufacturing business to expand further. Currently, they are processing their license with the Food and Drug Administration, which will allow them to sell their products to pharmacies nationwide. Mr. Castro added that, “Through the financial assistance given by the Rural Bank of Liloy, our dream of selling our product nationwide is now within reach”. In 2011, Mr. Castro was awarded with the Citi Microentrepreneur of the Year Award for Mindanao under the Masikap category (view article).
The Rural Bank of Liloy has benefited from participating in the USAID-supported RBAP-MABS program which provided the bank with training and technical assistance to develop and enhance their microfinance services. The bank has already provided more than PhP 5.3 million (US$ 123,255) in microfinance loans to 2,200 microfinance borrowers and provides micro-deposit services to more than 9,600 through 4 rural bank branches and other banking offices in Zamboanga del Norte in Northwestern Mindanao.